CPB Discussion paper

n° 387, November 2018

The effect of reinsuring a deductible on pharmaceutical spending: A Dutch case study on low-income people

NON Marielle, DOUVEN Rudy, VAN KLEEF Richard, VAN DER GALIËN Onno

The basic health insurance in the Netherlands includes a mandatory deductible of currently 385 euros per adult per year. Several municipalities offer a group contract for low-income people in which the deductible is reinsured, meaning that out-of-pocket spending under the deductible is covered by supplementary insurance. This study examines to what extent such reinsurance leads to higher pharmaceutical spending. We use a unique dataset from a Dutch health insurer with anonymized individual insurance claims for the period 2014-2017. We run a difference-in-difference regression to estimate the effect of reinsurance on pharmaceutical spending. The treatment group consists of enrollees from three municipalities that implemented reinsurance on January 1st 2017. The control group includes enrollees from three municipalities that didn’t implement reinsurance. We find that the introduction of reinsurance led to a statistically significant increase in pharmaceutical spending of 16% in the first quarter of 2017 and 7% in the second quarter. For the second half of 2017 the effect is small and not statistically significant. Conditional on people with low expected spending we find a statistically significant increase in pharmaceutical spending in all four quarters of 2017 varying from 22% to 30% per quarter.

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n° 386, November 2018

Can we measure banking sector competition robustly?

DUBOVIK Andrei, KALARA Natasha

We discuss existing measures of banking competition along with their advantages and disadvantages. For the Panzar and Rosse H-statistic,we further investigate the robustness of its estimates. Specifically, we consider how the estimates vary with respect to modelling and data choices along the following dimensions: 1) bank types 2)consolidation codes 3)time periods 4) outliers 5)econometric models We construct a robust H-statistic estimate following a modified DerSimonian and Laird procedure. We find that no robust conclusions can be drawn regarding the relative competitiveness of the banking industries in European countries, nor regarding the development of the aggregate level of competition in Europe over the past twenty years. This finding illustrates why there is little consensus about the H-statistic estimates despite numerous publications on the topic. Additionally, we check which dimensions are most important in driving the differences between the estimates and find that the choice of model speci cation plays the largest role.

(texte intégral du n° 386)

n° 385, October 2018

Estimating migration changes from the EU’s free movement of people principle

ROJAS-ROMAGOSA Hugo, BOLLEN Johannes
We estimate the impact of the free movement of people (FMP) principle on bilateral intra-EU migration stocks using a gravity model. Employing a combination of the World Bank and the UN’s global migration databases, with observations between 1960 and 2015, allows us to analyse the impact of the FMP for most EU member states. We find that implementing the FMP by an EU member state increased, on average, its stock of intra-EU migrants by 28%. The vast majority of intra-EU migration went to the old member states and we find that FMP had a substantial impact on migration originating from both old and new member states. The only exception is migration within new member states, which was negatively affected by FMP.

n° 384, October 2018

Causes of regional variation in Dutch healthcare expenditures: evidence from movers

DOUVEN Rudy, REMMERSWAAL Minke, MOURA Ana, SALM Martin

We assess the relative importance of demand and supply factors as determinants of regional variation in healthcare expenditures in the Netherlands. Our empirical approach follows individuals who migrate between regions. We use individual data on annual healthcare expenditures for the entire Dutch population between the years 2006 and 2013. Regional variation in healthcare expenditures is mostly driven by demand factors, with an estimated share of around 70%. Both demographics and other unobserved demand factors, e.g. patient preferences, are important components of the demand share. The relative importance of different causes varies with the groups of regions being compared.

(texte intégral du n° 384)

n° 383, September 2018

The changing landscape of firm financing in Europe, the United States and Japan

KALARA Natasha, ZHANG Lu

We re-examine the structure of the financial sector, with a focus on firm financing, household assets and the structure of the banking sector of the 28 EU member countries, Japan and the United States. Our analysis is based on an extended panel dataset of 25 indicators over the period 1995-2016. This paper is an update and extension of a previous study by Bijlsma en Zwart (2013). Using principal components analysis as in Bijlsma and Zwart (2013), we classify the EU-28 countries into different groups according to their financing patterns in 2015.

n° 382, September 2018

Are substitute services a barrier to controlling long-term care expenditures?

KATTENBERG Mark, BAKX Pieter

In many developed countries long-term care expenditures are a major source of concern, which has urged policy makers to cost reductions. However, long-term care financing is highly fragmented in most countries and hence reducing total costs is complicated: spending reductions in one type of care may have spillover effects elsewhere in the system. These spillovers may be substantial, as we show using a reform in the financing of one type of publicly financed home care in the Netherlands, domestic help. We show that this reform not only affected consumption of this care type, but also the consumption of three other types of long-term care that are financed through another public scheme.

(texte intégral du n° 382)

n° 381, September 2018

The scope of the external return to higher education

VERSTRATEN Paul

This article examines whether the productivity spillovers from a large share of highly educated workers occur within regions, sectors and/or firms. To distinguish between these possibilities, I follow a two-stage procedure to estimate a Mincerian wage equation using matched employer-employee panel data on individual earnings and educational attainment. The results indicate that the scope of higher education spillovers is very limited. Most of the identified spillovers occur within firms, being a factor of 2-3 larger than those operating outside the firm. The spillovers that take place outside the firm are restricted within the own sector and only occur on short distances from the working place. The limited scope confirms the view that higher education spillovers foster aggregate productivity through the exchange of tacit knowledge, which isheavily dependent on face-to-face contact.

(texte intégral du n° 381)

n° 380, May 2018

Economic Decision Problems in Multi-Level Flood Prevention: a new graph-based approach used for real world applications

ZWANEVELD Peter, VERWEIJ Gerard

Flood prevention policy is of crucial importance to the Netherlands. We assess economical optimal flood prevention where multiple barrier dams and dikes protect the hinterland against sea level rise and peak river discharges. Current optimal flood prevention methods only consider dike rings with no dependencies between dikes. We propose a graph-based model for a cost-benefit analysis to determine optimal dike heights with multiple dependencies between dikes and barrier dams.

(texte intégral du n° 380)

n° 379, April 2018

How large are road traffic externalities in the city? The highway tunneling in Maastricht, the Netherlands

TIJM Joep, ZWANEVELD Peter, VAN MAARSEVEEN Raoul

Infrastructure projects are increasingly aiming to improve liveability, in particular in urban areas. We analyse a specifi c case in which an existing highway in an urban area was moved underground in order to improve intercity traffic flows and to reduce traffic externalities. As travel times within the city hardly changed, this allows for a clean identifi cation of the value of traffic externalities. We find that the liveability bene fits of such integrated infrastructure are substantial relative to the construction costs. Each halving of distance to the tunneled segment is associated with 3.5% more appreciation in house prices since the start of the project.

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n° 378, March 2018

Does managed competition constrain hospitals’ contract prices? Evidence from the Netherlands

DOUVEN Rudy

In the Dutch health care system health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers.

(texte intégral du n° 378)

n° 377, February 2018

Why do wages grow faster in urban areas? Sorting of high potentials matters

VERSTRATEN Paul, VERWEIJ Gerard, ZWANEVELD Peter

The existence of an urban wage growth premium is a well-established empirical fact. This article challenges the conventional view that faster wage growth for urban workers is caused by human capital spillovers.

(texte intégral du n° 377)

n° 376, February 2018

Complexities in the spatial scope of agglomeration economies

VERSTRATEN Paul, VERWEIJ Gerard, ZWANEVELD Peter

This article argues that the spatial scope of agglomeration economies is much more complex than is often assumed in the agglomeration literature. We provide insight into this issue by analyzing panel data on individual wages with a high level of spatial detail.

(texte intégral du n° 376)

n° 375, February 2018

Optimal Taxation of Secondary Earners in the Netherlands: Has Equity Lost Ground?

DE BROER Henk-Wim, JONGEN Egbert, KOOT Patrick

The Netherlands witnessed major reforms in the taxation of (potential) secondary earners over the past decade. Using the inverse-optimal method of optimal taxation we recover the implicit social welfare weights of single- and dual-earner couples over time. The social welfare weights are grosso modo well-behaved before the reforms.

(texte intégral du n° 375)

n° 374, February 2018

Do paid teacher trainee programs lead to additional teachers in secondary education? A Regression Discontinuity Analysis

DEELEN Anja, KUIJPERS Sonny

This paper evaluates the quantitative effects of two teacher traineeships that were implemented in the Netherlands to address shortages of fully qualified teachers in secondary education. Applying a fuzzy regression discontinuity design, we estimate the effects of being selected to participate in one of the traineeships. We find no significant local average treatment effects of being selected on the probabilities of enrolling into academic teacher training, obtaining a full teaching qualification, and on working in education, although the point estimates are positive for the first two outcome variables.

(texte intégral du n° 374)

n° 373, February 2018

Competition and pricing behavior in long term care markets: Evidence from the Market for Assistance in Daily Housekeeping Activities

VAN EIJKEL Remkel, KATTENBERG Mark

Exploiting a rich data set on the Dutch market for assistance in daily housekeeping activities (ADHA), we find that larger providers obtain a higher price than do small providers. However, compared to other studies on market power in care markets this price difference is considered small to moderate.

(texte intégral du n° 373)

n° 371, February 2018

The effects of unconventional monetary policy in the euro area

ELBOURNE Adam, JI Kan, DUIJNDAM Sem

How effective are unconventional monetary policies? Through which mechanisms do they work? This discussion paper contains a detailed presentation of the new scientific evidence we reported in the policy brief, and adds to the relatively scarce literature in this field.

(texte intégral du n° 371)

n° 372, February 2018

Effects of Unconventional Monetary Policy on European Corporate Credit

VAN DIJK Machiel, DUBOVIK Andrei

In this paper we investigate whether the targeted longer-term refinancing operations (TLTRO) and the asset purchase program (APP) led to lower interest rates on new corporate credit, and whether the signalling channel and the capital relief channel played any role in the transmission of these ECB policies.

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n° 370, January 2018

Should CBA’s include a correction for the marginal excess burden of taxation?

BOS Fritz, VAN DER POL Thomas, ROMIJN Gerbert

According to economic theory, taxation drives a wedge between private and public benefits, which distorts labour supply, consumption and investment and leads to loss of welfare.

(texte intégral du n° 370)

n° 369, January 2018

Firm heterogeneity and exports in the Netherlands: Identifying export potential

ZWANEWALD Peter, VAN MAARSEVEEN Raoul

According to the Melitz (2003) model, potential exporters have to be sufficiently productive to overcome the entry costs of foreign markets. Once firms pass this productivity threshold, they all export. However, empirical evidence indicates that a substantial share of high-productive firms do not export.

(texte intégral du n° 369)

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